CHICAGO, Sept. 3 (UPI) -- Cost-saving productivity gains and escalating healthcare costs probably will keep U.S. hiring at a modest pace through 2005, a jobs outlook says.
"It remains difficult to justify new hires to those who control corporate finances," says John A. Challenger, chief executive officer of the global outplacement firm Challenger, Gray & Christmas.
"They see payroll costs surging, principally due to health benefits, while companies invest in new technology to assure that worker productivity continues to remain strong. So, why add new workers?"
Challenger said while the addition of 144,000 new jobs in August is a marked improvement, it still is below what is needed to offset monthly population growth.
Challenger said the issue of rising healthcare costs for employers would soon come to a head.
"Companies simply cannot afford to keep spending more and more for health coverage and simultaneously fund expansion," he said. "Something has to give. More firms will drop health care benefits, small business in particular."
